- Widespread fall in sovereign bonds weakens the yen.
- Japanese currency fails to get support even despite decline in equity markets.
- USD/JPY recovers 135.00 and the 20-day moving average.
The USD/JPY is making steady progress and is trading at 135.25, the highest level in a week. The pair remains in the high zone ahead of the release of US economic data.
USD/JPY advance took the price above the 20-day moving average for the first time since late July. On the upside, the next resistance appears around 135.40/50, which if overcome would improve the outlook for the dollar.
The rise in sovereign bond yields, fueled by the UK inflation data, is weighing on the yen, which is failing to gain favor even despite the drop in equity markets.
As far as data is concerned, Japan Foreign trade was reported for June, with a rise in exports of 19% compared to a year ago and 47.2% in imports. The trade deficit hit a record 2.13 trillion yen.
Ahead, the economic calendar shows the US retail sales report for July at 12:30 GMT, a 0.1% rise is expected. In the afternoon of the American session it will be the turn of the minutes of the last meeting of the Federal Reserve where operators will look for signals to see the path of monetary policy.
Technical levels
Source: Fx Street
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